Princessa Beauty Products Harvard Case Solution & Analysis

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Introduction

Princessa is a beauty product retail stores established in Canada more than two decades ago. Its sole purpose is to make black Americans beautiful through their beauty products related to hair and skin.  These products are particularly being made according to the beauty needs of the black community of Canada.

The sales of the company are showing negative results during the year 2007 that have taken the company into a serious situation. While the company was dealing with low growth rate, increased cost of raw material has also contributed to the difficulties of the company in terms of increased buying cost from suppliers. This drift in the cost of raw material was not the only the matter of concern that the company has to deal with but the increased oil prices has also made the owner think about the beauty product’s demand of the consumer which will suffer because of the increase in the cost of other living items. To deal with all these issues successfully the company needs to retain a strong financial position in the market. For which the CEO was planning to renew its marketing plan that will positively contribute to the sales growth of Princessa beauty products.

Problem statement

Currently, the company is going through the phase of sales decline after its two years of growth stagnation. The CEO of the company is highly concerned on this issue and identifies the cause to be related to the marketing strategy of the company during the past years when sales were about to show constant figures. In this way, George Richards the CEO of the store line identifies different alternatives for renewing their beauty products and marketing strategy that also evaluates those alternatives with their positive and negative aspects. Now the point of focus is to identify the single strategy that will increase annual sales of the company through which company would be able to deal with its competitors and other external threats regarding raw material prices. After the identification and analysis, we will recommend how to implement these alternatives to make them useful for the promotion of the products.

PEST Analysis

Political

The political situation in Canada is stable, but the country is also not providing subsidies for the production of beauty product. Canada possesses a federal system of parliamentary administration with compact democratic civilizations charted across the country. There are also several other parties that operate in Canada; these parties are relatively small but can show their influence over the political practices and procedures. In general, the political situation is quite stable and sounds favorable for business purposes. Politically, they might have no issues with running a beauty product retailer in Canada.

Economic

The Canadian economy is considered as one of the wealthiest in the world and is dominated by the service sector. It has been shown that the country possesses lowest unemployment rate before 2008, however, after that the country has gone through a recessionary era which resulted into an overall increase in the oil prices. From the perspective of beauty products it has also shown quite positive results, however the increment in the oil prices has influenced the prices of all other entities related to the routine living standards of the Canadians. The impact of this increase will shrink consumers spending on beauty products with the thought  of saving money for their basic needs. Whereas the fact that the 13% feminine population will be highly inclined to preserve their beauty and will not ignore it in any case. The overall structure of beauty industry consist of baby care products, bath and shower deodorant, hair care, men grooming, hygiene and other related products while Princessa ‘s has made their mark in the market through its hair and wigs extension.

Social

Princessa solely targets the black American, Canadian citizen for their beauty products. More than 90% of Princessa’s consumers are earning women whose annual income was below $45000. Most of them lived near Princessa’s retail stores which a makes them so easy to shop from Princessa. The company has entered into the market by making establishing the sense that Princessa’s products will make the user feel good about themselves by appearing good by the looks……………….

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Canada is becoming more multicultural, and many members of these groups to start small retail business. This case is an example of one such situation. Princessa cosmetics sold in the English speaking black community in Montreal. In 2005 and 2006, sales were flat, and in 2007, sales dropped by about 16 percent. The owner was worried and wondered what action, if any, it should take. Although the questions were clearly focused marketing, recommendations and their implementation have been limited limited human and financial resources. Demographic information and maps are available in Montreal. Case is designed to familiarize students with the issues associated with the marketing of the ethnic groups of secondary data, defining the retail market and the development of a strategic plan for a small business operating under severe resource constrictions. “Hide
by Christopher A. Ross Source: Richard Ivey School of Business Foundation 14 pages. Publication Date: October 19, 2010. Prod. # 910A18-PDF-ENG

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